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By notice of deficiency, respondent determined a deficiency
in petitioners’ Federal income tax for the taxable year 1997 of
$6,495, and an accuracy-related penalty of $655.80 pursuant to
section 6662(a) and (b)(1).
In the notice of deficiency, respondent determined that
petitioners failed to report $50,847 of taxable wages petitioner2
received during 1997. Petitioner’s wages were reported by five
separate employers on Forms W-2, Wage and Tax Statement, as
follows:
ALIC $411
Department of the Air Force 3,264
The Boeing Company 39,295
Volt Management 7,678
Morning Sun, Inc. 199
Total $50,847
When petitioners filed their 1997 tax return, they attached
a statement explaining their position for the difference between
the amounts reported as gross income on their tax return and the
amounts reported on the Forms W-2. Evidently, petitioners raised
arguments that wages were not includable in gross income. In the
attachment, petitioners requested advice from the Commissioner as
to the validity of their position. On June 23, 1998, the
Commissioner sent petitioners a correspondence notifying them
that the position taken on their 1997 tax return was frivolous
and without merit. The June 23, 1998, correspondence commenced
2 References to petitioner in the singular are to James
Carskadon.
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